An Update on the Clawback: Revised Health Spending Data Change State Financial Obligations for the New Medicare Drug Benefit

An Update on the Clawback: Revised Health Spending Data ChangeState Financial Obligations for the New Medicare Drug Benefit

States are obligated to finance part of the new Medicare prescription drug benefit via a monthly “clawback” payment to the federal government. This issue update analyzes the latest data and provides an overview of the state financing of the Medicare drug benefit. Revisions by the federal government due to updated data has resulted in an estimated net decline in the amount states will send to the federal government in 2006 through the clawback of more than $700 million.